Video Transcript:

Hey, folks, Matt Horwitz at llcuniversity.com. I hope you’re doing well. How to form an LLC in Colorado. I’m going to run through the five steps with you. Don’t worry, I’m not cheating. I actually wrote this. Notes are really helpful for me. We teach in all 50 states. Rather than keeping all of this stuff memorized in my head, I don’t want to sound like an idiot, so I’m going to read this off to you. If you don’t know what an LLC is, it is a type of legal business structure that’s created under state law. This video is specific to Colorado. There are five steps to forming an LLC in Colorado. Let’s run through them. First, you’re going to choose your LLC name. We’ll go into more details in a second. First, you’re going to choose your name. Number two, you’re going to select your LLC’s registered agent. I’m going to debunk a lot of myths there. Number three, you’re going to file the articles of organization with the Colorado Secretary of State. The cost is $50. Step four, you’re going to complete an operating agreement. Step five, you’re going to get your LLC’s EIN. Then after your LLC is formed, there is two more steps: filing the Periodic Report and filing your state taxes. Let’s start with step #1: choosing a name for your Colorado LLC. I’m just going to go through the highlights here. You need to have the abbreviations LLC or L.L.C. at the end of your name. You cannot use the words Corp or Inc or Incorporated or Incorporated at the end of your name. You can’t use the words like Bank and Insurance or any of the restricted names. We have another video on our channel and on our website that walks you through how to search the Colorado Secretary of State Business Entity Search to make sure that your desired name is distinguishable. Some other tips when choosing a business name: make sure that’s creative, try to pick a name that’s easy to spell and short, not something really long because that’s going to make your domain name. Anytime someone mentions your business, it’s going to be really confusing. Try to pick a name that has a positive connotation and shows your business in a good light. The link for the Colorado Business Entity Search is either below this video or on our website, depending on where you’re watching it. If you have any questions, just call the Colorado Secretary of State phone number below this video. The second step, after you’ve found your name, is to choose your LLC’s registered agent. Most people are massively misinformed when it comes to choosing a registered agent. So many other websites lie and hide the fact that you can be your own registered agent. They say things like, “Your LLC is required by law to have a registered agent,” period. They don’t tell you, “Yes, that is the law, but in Colorado, Colorado is unique. Your own LLC can serve as its own registered agent, and you can be your own registered agent. A friend or family member can be the LLC’s registered agent. The only requirement is that they have a physical street address-no P.O. box-a physical street address located in the state. If you don’t have a friend or a family member or you yourself that have an address in the state, then we recommend that you hire a commercial registered agent. We recommend Northwest Registered Agent, the best company in the business in my opinion, $125 a year. All that information if below. Really, a registered agent is just a fancy name for a person or a company who agrees to accept of service of process, which is legal documents like a subpoena or a complaint or a summons, in case you get sued. Hopefully, you don’t. They just agree to accept that on behalf of the LLC. That’s what a registered agent is. For most of you, that cost is going to be $0. Don’t believe all the hype and bullshit you see in the internet. Third step is filing your formation documents with Colorado. In Colorado, it’s called your articles of organization. Colorado is a very affordable state. It’s $50 to form an LLC in Colorado. It can only be done online in Colorado. Colorado is very unique and very advanced. You cannot form your LLC by sending the docs in the mail. It’s all done online. You’ll pay with a debit or a credit card. The articles of organization is pretty simple. They’ll have the name of your LLC, your name, your address, the registered agent’s name and address. We have another video that will walk you through step-by-step exactly how to file that with the state. The coolest thing about Colorado is when you file online, your LLC is literally is instantly approved at the end vs. a lot of other states where you have to wait days or weeks for approval. Colorado is definitely up there in the books as one of the top states. Once your LLC articles of organization are approved at the state, the next step is to complete your operating agreement. The operating agreement is a contract between the members of an LLC. It’s still good to have even if you have one member for liability. Reasons: it basically spells out who owns the LLC, how much of the LLC do they own, how are taxes, how are profits and losses distributed, etc. You can download a free operating agreement template from our website and just fill in the blanks. It’s super easy. Again, we have another video on that. That’s your operating agreement. Then you’re going to get your EIN. This is step 5. Your EIN, employer identification number, it’s also known as your federal tax ID number. They’re all teacher same thing. Think of it as a social security number but for the business. It identifies your business with the IRS. You’re going to use it to pay taxes, open a bank account, handle employee payroll, and you might need it for some business licenses and permits. This is completely free, $0. You can get it from the IRS via their online application. We’ll walk you through that step-by-step. Takes about 15 minutes. The only thing you want to make sure, is make sure that your LLC is approved before you get your EIN. A lot of people make a mistake of they get the EIN at the same time they’re doing to LLC, they’ll do it ahead of time, and they get the EIN attached to the wrong LLC name or they think they’re doing it correctly but they end up getting the EIN for themselves. There’s just a Sole Proprietorship, and then their assets aren’t protected. Anyways, getting your EIN is really simple. It’s really straightforward. IRS website; takes 15 minutes. We’ll walk you through it step-by-step. That’s pretty much all it takes to form an LLC in Colorado: 50 bucks. It’s ridiculous. It’s online. It’s very fast. After your LLC is formed, you have two things to take care of. These are called post-formation requirements or how do you maintain your LLC. The first one is called, in most states, it’s called an annual report. In Colorado, it’s called a Periodic Report. It’s due once a year. The annual fee is $10. Come on, it’s ridiculous. Colorado is such an awesome state. Again, this is filed online with a debit or a credit card. You have this thing called your periodic month. Think of this as a fancy word for your anniversary month. If your LLC was filed in June, June is your anniversary month. So every year, that’s your periodic month. You can file your Periodic Report during that month, two months before or two months after. You basically have a five-month window to file that, pay the $10. If you miss that five-month window, you have an additional 60 days where you can file. You have to pay a $50 late fee. Then if you miss that, your LLC goes into a delinquent and non-compliant status, and eventually you can’t do business in Colorado. Then you need to file your Colorado state taxes. Form 104 is the form in Colorado. Pretty simple. Just have your accountant or tax professional make sure you file your taxes every year. Those are the only two things you need to do to keep your Colorado LLC in compliance. Other than that, let us know if you have any questions. Hopefully, that simplifies the process of the five steps to form an LLC in Colorado. Again, Colorado is one of my favorite states just because it’s all online. It’s super easy. It’s quite affordable. Check out the other videos on our channel. Check out the videos on our website. We’ll walk you through everything for free step-by-step. No hook; no catch. All right. Let us know if you have any questions. Hope this information is helpful for you.

Forming a Colorado LLC: An Easy How-to Guide

The single biggest reason why you should form an LLC in Colorado is to protect your personal assets.

A Colorado LLC, or Limited Liability Company, is a type of business entity formed under Colorado law.

An LLC gives you personal liability protection in case your business gets sued.

A Colorado LLC can do the following:

run a business

hold assets like real estate, boats, planes, and other vehicles

make money

own and lease property

enter into contracts

open a bank account

sue and be sued

An LLC creates a wall of protection between your business and personal assets. Your personal assets are protected in the event your business gets sued.

There are 5 steps to forming an LLC in Colorado. They are:

Choose a Name for your LLC

Select your LLC’s Registered Agent

File your LLC’s Articles of Organization

Draft and sign your LLC’s Operating Agreement

Get your LLC’s EIN (Employer Identification Number)

To make sure your LLC remains in good standing with the State after it’s been formed, you’ll need to:

Filing your LLC’s Periodic Report (due every year)

Paying your LLC’s Taxes

In this guide, we’ll show you the simple yet detailed steps to creating and maintaining an LLC in Colorado. Simple because it’s straight-to-the-point, and detailed because it has everything you need to get it right the first time.

Step 1: Choose a Name for Your Colorado LLC

When choosing your LLC name in Colorado, you have to follow certain requirements.

The abbreviations “LLC” or “L.L.C.” must be used at the end of your name. The abbreviation “LLC” is the most common.

Because an LLC is not a Corporation, your desired name should not use the word “Corporation”, “Incorporated,” or their abbreviations (“Corp.”, “Inc.”)

The name of your LLC must also be distinguishable. It needs to be unique when compared to the existing businesses found in the Colorado database.

If you want more details on how to make sure your LLC name is distinguishable, check out our free video lesson.

Tips to Picking a Great Colorado LLC Name

Be creative

Pick a name which is short and easy to spell

The name should have a positive connotation so people can easily remember it

Once you think of a few possible names, you’ll need to compare them to existing businesses in the Colorado Online Database:

Step 2: Choose a Colorado Registered Agent

Now that you’ve picked your LLC name, it’s time to choose a Registered Agent.

A Registered Agent is an individual or company who will accept delivery of legal documents (legal mail, notice of lawsuits, etc.) for your LLC. Your Registered Agent must have a street address located in Colorado.

Important: PO Boxes are not allowed. The Registered Agent must have a street address.

If you have a street address in Colorado, your options are:

You can be your CO LLC’s Registered Agent

Your LLC can serve as its own Registered Agent (a law unique to Colorado)

Step 4: Create an Operating Agreement for your Colorado LLC

An Operating Agreement is the written document that governs how you and any additional members run and operate your LLC. Unlike an LLC’s Formation Documents, your Operating Agreement does not have to be submitted to the State.

Important: Make sure your LLC has been approved by Colorado first before getting your EIN. You don’t want to have your EIN attached to a non-existent LLC.

An EIN is also known as a Federal Tax ID Number or TIN (Tax ID Number).

It is issued by the IRS to identify your LLC in Colorado.

Applying for an EIN can be done through mail, fax or online. We’ll focus on the online application as it’s the fastest and you’ll get your EIN in about 15 minutes. Applying for an EIN by fax takes 4 days and applying for an EIN by mail takes up to 4 weeks. Ain’t nobody got time for that! ;-)

For the online application, you’ll use one of the LLC member’s SSN (Social Security Number).

Important: You can still file your Colorado LLC’s Periodic Report within 2 months after the end of the 5-month window. But, you will be charged an extra $50 on top of the $10 filing fee as penalty. Your LLC will also be marked “Non-compliant”.

If you fail to file a Periodic Report within 3 months after your LLC has been marked “Non-compliant”, its status will be changed to “Delinquent”.

“Delinquent” status means your LLC will not able to do business in Colorado.

File and Pay Your Colorado LLC’s Taxes

Filing the correct documents and paying taxes can be challenging. We recommend hiring a good CPA/accountant for your tax needs.

Important: You and your CPA/accountant should be compatible. You want someone who is a good fit personally, as well as professionally. You also want someone who is patient and will take the time to answer all of your questions.

Form Your Colorado LLC Correctly

Forming an LLC shouldn't be so complicated. Our step-by-step guide will make the process a breeze – and no complex legal jargon! LLC University® teaches people how to form an LLC for free in all 50 states. We hope you find our free guides and resources helpful in your business journey.

Disclaimer: Nothing on this page shall be interpreted as legal or tax advice. Rules and regulations vary by location. They also change over time and are specific to your situation. Furthermore, this comment section is provided so people can share their thoughts and experience. Please consult a licensed professional if you have legal or tax questions.

8 Comments

Elizabeth Lind-HoffOctober 12, 2018

do you have to file your periodic report in the year you form your company or do you start on your anniversary?

Hi Elizabeth, your first Period Report will be due the year following your LLC’s year of formation. So if your LLC was approved in October 2018 (aka your “Period Report Month”), your first Period Report would be due in 2019. Your “filing window” would be five months in total; 2 months prior to the Periodic Report Month, the Periodic Report Month itself, and 2 months after. So broadly speaking, between August and December of 2019. More details can be found here: Colorado LLC Period Report. Hope that helps!

Just wanted to say this article was extremely helpful, I was finally able to set up my LLC after a long time of not knowing where to start, thank you! Although, I will say if I wanted to get a good CPA for my business tax filing, where would be a good place to start?

Leave a comment or question

This site doesn't provide legal or tax advice and is for general information only. If you need legal or tax advice, please consult an attorney and/or qualified accountant. Please see disclaimer and terms. Thank you.

LLCU is a Benefit Company, meaning, we’re not driven by profit, but rather by empowering entrepreneurs through free education. If you’d like to leave a donation and help support our mission, we would greatly appreciate it. Thank you!

ABOUT

LLC University® is a benefit company, meaning, we’re not driven by profit, but rather by empowering people through free education.